This article first appeared on GuruFocus.
The stock market ignored Palantir (PLTR, Financials) greatest quarter.The software and AI startup reported $1.18 billion in revenue and $0.21 per share in Q3 results this week, exceeding analyst expectations.
On paper, that wins. But Palantir’s stock plunged 12% in the days after the revelation, proving that high expectations can make good news seem awful.
Profit-taking contributed to the sell-off. After rising over 130% this year, several investors locked in gains. Hedge fund manager Michael Burry (Trades, Portfolio), who predicted the 2008 housing meltdown, reported a pessimistic bet against Palantir, owning put options on around 5 million shares. That headline alone fueled the selloff.
Additionally, market concerns are affecting tech and AI stocks. Palantir is under pressure as valuations rise and investors evaluate increased costs and slowing growth.
